The E-Procurement Business Case – Backbone for a Successful Implementation

This guest article comes to us from Xoomworks Procurement -

Digital transformation is on everyone’s lips these days in the business world. We hear everywhere that if you want your business to survive in this new era you need to go digital. Big words, which might sound scary for some of us. But actually, going digital or making the first few steps towards digital transformation, is more approachable than it seems if you take the time to break down all the elements.

Digital has transformed the way in which we buy and sell goods and services, to the point where most transactions are cashless and many of them are done from the comfort of our own home.

In the finance world, one of the building blocks for becoming digitally enabled is the purchase-to-pay process, with electronic procurement as its core element. We believe that electronic procurement should be the starting point for a digitally enabled spend function, as it helps companies to have a better view over their supplier relationships, it automates their ordering and purchasing process, provides transparency over their spending while digitising the entire supply chain.

In this blog we plan to highlight the importance of implementing an eProcurement solution and make sure that companies understand the factors they need to consider before implementation.

Why do you need an eProcurement solution?

In a volatile economic environment moving at a faster and faster pace it is hard to make savings and achieve efficiencies. Additionally, businesses are faced with challenges from all areas such as gaps in technology infrastructure, regulatory challenges, poor internal processes, supply chain risk, poor alignment between procurement and the business strategy etc.

If implemented properly, and preceding a strong business case, eProcurement solutions are designed to help speed up the order and purchase process whilst reducing risk and ensuring better compliance. Depending on your businesses needs or gaps, these solutions can have a great number of functionalities, from P2P automation and spend management to supplier relationship management.

A couple of years ago it was thought that eProcurement solutions are suitable only for large corporations with complex purchasing needs and a large pool of suppliers. However, in recent years eProcurement solutions have come a long way and software providers are now focusing more and more on solutions for mid-market players, making it essential for organisations to make use of this technology in order to remain competitive in today’s digitised business environment.

What to consider when building the business case for a new eProcurement solution?

Companies need to be aware that the actual project may evolve away from the initial business case. This isn't a problem when it comes to the end result. However, not taking this aspect into account can definitely be a problem. No one can predict exactly how things are going to go, how fast the system is going to be up and running, how long the user training and adoption process is going to take, or how long it will take to get suppliers onboard. That is why companies should be sure to take into account all the scenarios that could extend from the initial business case.

Building a strong and comprehensive business case should of course be a company’s first step in the journey to procurement transformation. The business case should help define how the new eProcurement solution fits into the procurement strategy and demonstrate how bringing all the procurement processes together under a single intelligent platform is going to help achieve procurements’ objectives and increase efficiency.

Here are a few aspects you need to consider when building the business case for an eProcurement solution:

  • Business strategy – like all parts of the organisation, procurement operates to the benefit of the whole organisation, making it important for the procurement strategy to be consistent with the overall business strategy. Same goes for the eProcurement business case, which should clearly state the benefits the new platform is bringing to the business
  • Understand the value it creates – the procurement department understands the value generated by an eProcurement system, however, this value needs to be communicated in a way in which the benefits are clear for both internal and external stakeholders: how it will help reduce cost and optimise spend, how risk management is going to be improved, how it will make processes easier for end users, how it is going to affect supplier relationships etc.
  • Data – when deciding to implement a new system into your organisation it’s important to build your business case on solid data. Hypothetical scenarios can help set your objectives, but company and stakeholder data combined with industry benchmarks are going to help paint a more accurate picture
  • Project timeline – changes never happen overnight, and adopting a new system is often a laborious project, as it affects multiple departments and has to be efficiently integrated with current systems. The business case should:
    • - Provide a timeline for the duration of the implementation and optimisation process
    • - Give details about user training and supplier onboarding programmes
    • - Provide an estimate over the period after which the organisation should start seeing the benefits of the new system
  • ‘What if’ scenarios – as previously stated, even with a strong plan in place, unexpected events can occur. Thus, it is important to predict these potential ‘what if’ scenarios and develop an appropriate plan of action. This will offer flexibility and can help you minimise the impact.

This is just a brief overview of the elements a good eProcurement business case should take into account, and all these elements should be broken down in subtasks. However much a laborious task this may be, the business case is essential for providing the backbone to the procurement transformation and getting the business onboard with the change.

Another important aspect to consider is that benefits are achieved through a combination of systems and behaviour change. Changing procurement behaviour and change management are two very important parts in achieving business case results.

Xoomworks Procurement helps businesses transform their procurement organisations into a valuable corporate asset. As well as assisting with the creation of a business case, Xoomworks can also act as an advisor in the process of vendor and system selection. We have direct experience working directly with the Gartner Magic Quadrant leaders for Source to Pay. Our experienced procurement consultants can recommend vendors based on the client’s requirements and assist in the creation and project management of the selection process.

 

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official position of Spend Matters

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